Texas State Exam Questions Flashcards

Texas State Exam Questions Flashcards Patty rents a storefront in downtown Arlington for her day spa, Boundless Beauty. She pays $1,500 a month in rent, plus a portion of the landlord's taxes, maintenance, and insurance (which fluctuates). Which type of lease does Patty have?Net leasePatty has a triple net lease because she is paying for a portion of all three of the landlords operating costs (taxes, maintenance, and insurance) on a regular basis -- in addition to her monthly rent. A net lease is one that requires a tenant to contribute to some of the landlord's operating costs. Both types of leases are favorable for the landlord because they allow rising costs to be passed along to tenants. Net leases an include caps on costs. A gross lease, in contrast is most similar to the typical residential lease that stipulates a fixed monthly rent regardless of the landlord's fluctuating operating costs. A gross lease with stops is a lease that allows the landlord to pass along some of the operating costs when they reach a certain level.Grant Parks, a general contractor, and his business partner Sam Davis, a licensed broker, decide to buy a rundown apartment building in downtown Houston for which Sam is the listing agent. The property has been on the market for over nine months and has not attracted any offers. Grant and Sam plan to rehab the building and seek a change in zoning to make it more marketable. Can Grant buy the property from the seller without his partnership with Sam being disclosed?No, the seller should be informed of Grant's partnership with SamSam owes fiduciary duties such as loyalty, confidentiality, full disclosure and reasonable care to the seller and he is obligated to disclose his relationship with the buyer to avoid any conflict of interests. A conflict of interest could be presumed if Sam, as the buyer's partner, is placing his own interests above the needs and interests of the seller in trying to negotiate a fair contract. An informed seller could make the choice to retain Sam as the listing agent or to employ a new agent. Without full disclosure, though, the seller may be unaware that his interests are not being fully represented.NOTE - Sam is a business partner of Grant's, so he has an interest in the business purchasing the property that must be disclosed to the seller.What is required for a broker to act as an intermediary?The broker must have written permission of the seller and the buyer, including information on how the broker is to be paid.According to the contract, who is responsible for providing the appropriate notices for property located in a statutory tax district?the sellerIn Texas, statutory tax districts are known as Municipal Utility Districts (MUDs) TREC can investigate the actions of a license holder at its own motion. Under what other circumstances can TREC investigate a license holder?If they have a written, signed complaint no more than 4 years old.A licensed real estate salesperson is working at a small brokerage in San Antonio. Which of the following functions can she NOT perform without an agency agreement holding monies for disbursement in escrow until closingTo safeguard the client's interests, a broker must have a signed agency agreement stipulating the manner of disbursement of funds before they can accept escrow

monies. However, a broker can assist clients in locating a property, preparing a contract or lease, or obtaining financing without executing a representation agreement.

A licensee has been successfully sued by a past client in connection with a single transaction. The client has prevailed and been awarded a judgment of $75,000.00.The licensee has declared bankruptcy and is unable to pay the judgment. The client has applied to the Texas Real Estate Commission for payment out of the Recovery Trust Account. The Texas Real Estate Commission has agreed to the payment. How much will the client receive?$50,000According to TREC, "Regardless of the number of applicants, payments from the Real Estate Recovery Trust Account may not exceed $50,000 per transaction, with a maximum of $100,000 per license holder for multiple transactions. Payments from the Real Estate Inspection Recovery Fund may not exceed $12,500 per transaction, with a maximum of $30,000 per license holder for multiple transactions.The term "holographic" refers to which of the following types of wills?hand writtenA holographic will is a do-it-yourself handwritten will. To be valid this will must be totally in your own handwriting, signed and dated. About 20 states allow holographic wills, but it is best to have a more formal will.How much notice must a landlord give a delinquent tenant, in writing, before filing an action to evict?

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What is the difference between statutory tax rate and effective tax rate?The statutory tax rate is the rate imposed by law on taxable income that falls within a given tax bracket. The effective tax rate is the percentage of income actually paid by an individual or a company after taking into account tax breaks (including loopholes, deductions, exemptions, credits and preferential rates).Which of the following statements is true of a security deposit?a security deposit must be returned to the tenant within 30 days of the end of the lease unless the property has been damaged When is it NOT mandatory for the seller to provide a copy of the "Seller's Disclosure of Property Condition" to prospective buyers?When the property is a commercial property -- it is required in a FSBO Where is "time is of the essence" found? Time is of the essence is not found in the Notice Regarding Coastal Area Property. Time is of the essence is found in the sales contract in paragraph 23, the termination option paragraph. It is also found in the Third Party Financing Addendum and the Short Sale Addendum.Arthur was a Texas licensed Real Estate Sales agent for a long time. He then chose to become inactive and Texas Real Estate Commission has been holding his license in inactive status. He now wants to activate the license. What does he need to do?Apply through a broker, pay $200 and take an 18-hour continuing education course The Texas Real Estate Commission has received an application for a Texas Real Estate Sales License from Mary. Mary has completed all her educational requirements and passed the state exam. At this point, the Texas Real Estate Commission will begin the background check.Which of the following statements is not true?A. The Texas Real Estate Commission will notify Mary if her application for license is denied.B. The Texas Real Estate Commission has no time limit for determining the "integrity" of an

applicant like Mary.C. The Texas Real Estate Commission has 30 days to complete the background check.D. Mary can appeal a denial of her application within 30 days.The Texas Real Estate Commission has 30 days to complete the background check.The Texas Real Estate Commission has no limit on days to review your application or complete your background check. TREC will notify an applicant if the application for license is denied. An applicant has 30 days from the date their application was denied to request a hearing.Which of the following statements about the Texas Real Estate Commission is false?A. Real estate rules and